Asian stocks advanced Thursday, recovering from earlier market turbulence tied to tariffs, mixed tech earnings, and uneven US economic data. Major equities in Australia, Japan, and South Korea saw gains, while stocks in mainland China and Hong Kong fluctuated during the opening session. US equity futures were stable, with the S&P 500 and Nasdaq 100 both extending their rebounds from Monday’s sharp decline.
Treasuries also remained steady after a rally across the curve on Wednesday. The US 10-year yield fell to 4.42%, its lowest since mid-December, while the 2-year yield dropped to 4.18%. Australian bond yields also decreased in early Thursday trading.
The Japanese yen strengthened for a fourth consecutive day, partly due to comments from Bank of Japan’s Naoki Tamura, signaling a potential rise in Japanese interest rates to 1% by the second half of fiscal year 2025. Hedge fund activity in currency markets has also contributed to the yen’s gains.
The calm in global markets came after a week of volatility following President Trump’s tariff impositions. Investors are now awaiting the release of US jobs data on Friday, which will influence the Federal Reserve’s stance on future rate cuts.
Weaker-than-expected US service sector demand data suggested the economy might slow in the coming months, especially as high living costs could lead to more cautious spending. Additionally, a pickup in January employment numbers provided a mixed outlook, coming ahead of the upcoming US jobs report.
Market participants are keenly watching the US job market, with the Fed potentially lowering interest rates later this year if employment growth continues to moderate. Treasury Secretary Scott Bessent noted that the Trump administration is focused on reducing 10-year Treasury yields rather than short-term interest rates set by the Federal Reserve.
In corporate news, Nomura Holdings saw an 8% increase in its share price after a stronger-than-expected profit report, while Nissan Motor Co. gained and Honda Motor Co. shares fell amid speculations regarding a potential merger.
Looking ahead, inflation data is expected for Vietnam and Thailand, and the Bank of England is anticipated to reduce interest rates by 25 basis points to 4.5%.
Elsewhere, China called for discussions with the US at the World Trade Organization following the imposition of 10% tariffs on Chinese imports. The US’s actions have been criticized by China as being based on “unfounded and false allegations.”
In commodities, gold held steady after hitting a record high, driven by concerns over market tightness. US oil prices inched higher after a 2% drop on Wednesday. Saudi Arabia also raised the price of its flagship crude to Asia, responding to strong premiums for Middle Eastern crude and improved refinery margins.
Tamar Essner of Vectis Energy Partners noted the uncertainty surrounding global demand, especially given questions surrounding Chinese demand, which is seen as a critical driver of growth.
Related topics:
Silver Faces Resistance as Traders Await Key Catalysts for Breakout
What Are the 3 Best Railroad Stocks to Buy Now?
